On March 29, the Electric Power Supply Association hosted its first Competitive Power Summit in Washington, DC. Leaders from across the competitive power market discussed the key issues facing the sector, including maintaining reliability as the grid changes, market innovations, advancing decarbonization, ensuring a just transition with continued customer and economic benefits, and future market design. While there was much to debate around these topics, many speakers agreed on the basic tenets of what’s necessary to achieve reliable, affordable, and clean power.
This is the fourth installment of a six-part blog series on the themes and key takeaways from EPSA’s Competitive Power Summit, which will showcase how decarbonization of the electric grid will factor into the competitive market’s planning while continuing to deliver energy reliably and affordably.
In case you missed it:
“When you think about the grid, it is fairly simple. It’s a collection of wires and a bunch of devices for converting energy inputs into electricity outputs. If our wholesale market structures and the various regulatory processes we have around their structure don’t give use the four pillars of equal strength, something’s going to break down and you will have adverse outcomes,” said Gordon van Welie, president and CEO of ISO New England
To enable the decarbonization of the power sector, the panel agreed there need to be several key pillars implemented: (1) more clean power generators on the grid; (2) expansion of transmission lines to carry electricity from remote production facilities to coastal load centers; (3) an energy reserve in the system to provide stability to intermittent renewable sources; and (4) market structures to support balancing resources.
The U.S. has excelled in some, but not in all of these areas. Clean power generating technologies have or will soon reach commercialization, enabling the first step to decarbonization. However, the country continues to struggle with the expansion of transmission lines to carry that energy to its end-use destination. The market structure is largely in place but must be modified to support renewables integration with the grid.
The scale of investment required to achieve decarbonization of the power grid and the wider economy is immense, with some analyses cited by the panel suggesting up to $150 trillion of capital investment to fully decarbonize. However, there was agreement that maintaining the status quo will be more expensive and prove to be more unreliable in the future. Industry and policymakers must make standardization of products a priority if a decarbonized energy system, more reliant on electrification, is to be realized.
In part five of the Competitive Power Series, we will present the key findings from the “Continued Consumer and Economic Benefits in a Just Transition” panelists.